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Old 3rd February 2010, 07:27 PM   #1

Join Date: Feb 2010
Posts: 2
Default Bank Of America/First Data Assault On Small Business

iMarinePower LLC is a small but successful small business founded in July 2009 with no outside capitol, no loans, no grants, and no taxpayer dollars. Our business grew as sales increased and we became known for our customer service. We provide a complete solution for Marine, Industrial and Automotive powertrain and drive components.

In our first quarter, we successfully completed a contract with the United States Government and continued to grow our commercial customer base. In late December we contracted 2 full time sales agents and in January we contracted another full time sales agent with the hopes of adding 5 more by the end of February to complete a successful launch of our Automotive Division.

Our business banking relationship for everyday business activities is with Bank of America. Initially, our merchant services account was held by a small company; but in reviewing our growth, we felt our merchant services would best be serviced by Bank of America since they knew our company. We felt this switch would help ease our book keeping. So we signed on the dotted line to have BOA handle our credit card transactions and Cybersource handle our gateway solution.

Initially, our transactions were processed quickly and efficiently, although the batches didn’t make sense on a daily basis, at week’s end the numbers added up. We were reluctantly pleased with our decision.
On January 26th, 2010 we received our last deposit of sales completed the day prior. Thursday, January 28th, a call to Bank of America revealed that our merchant services account was not handled by BOA, that in fact, First Data had subcontracted our account. Our funds were on hold for review and that the previous three days transactions would be released immediately to post to our account within 24-48 hours.

Monday February 1st revealed no deposits. First Data began to release part of the reasoning as they saw fit. Our account was under review by their security department because our sales were far above expectations. Our account was first approved for 600K in gross credit card transactions per year and January’s success put us on track for 1.5 million in sales. In order to have our funds, which by now approached nearly 40K, returned to us we had to provide a client list, tracking information and phone number for every customer in January. The audit process called for First Data to contact each of our clients to verify that we had, in fact, completed our contractual obligation. To add insult to injury, First Data somehow saw fit to charge us the processing fees for January and even charge our BOA account a refund to a customer whose funds are held by First Data, meaning we have refunded customer money that we don’t even have.
o date, iMarinePower LLC has not a single chargeback issue and has held itself to the highest customer service standards. We conduct great business and have repeat customers. Our small company has all but shut down as our advertising had to be suspended today. Payments we normally make to our vendors on the first of the month are late, putting our good name at risk. Every customer from last week that purchased from us now has a product for which we have no payment. The ripple effect from this disruption, assuming we can even recover, will take weeks and months to repair.

There are fundamental issues with the way this has taken place. First and foremost is we had no knowledge of our merchant services account being contracted to First Data and our contract is with BOA. Not that this would have influenced our decision, but its generally good business conduct to know by whom your company is being serviced. Secondly, I cannot possibly fathom the logic behind contacting all of our clients from January. First Data insist they will conduct themselves in a professional matter although that seems unlikely given the conversations I’ve had. We offered up immediately all the tracking information we had for each transaction which would provide delivery confirmation and a signature, but this was not sufficient. According to a First Data Manager, William J. Broger, if I refused to provide the phone numbers for all of our clients, he would freeze our account for 90 days while the transferred our merchant account off, then 180 days per Visa and MasterCard rules, and then another 90 days “ just because he can”. To summarize, should we choose not to have our business relationships jeopardized by having someone check up on us, they would hold our funds indefinitely to make us suffer further.

With the current economic state and unemployment at record highs, it seems counterproductive to me that our growing and employing small business is being attacked in this way. Without the resources we’ve established through our good business practices our company would be in grave danger. Unfortunately, it seems as though this is taking place within the limits of the law and our options are limited. Perhaps a small part of this is to blame for the current economic crisis. Perhaps we should re-evaluate these types of practices. With billions in stimulus dollars being thrown around and taxpayer bailouts costing us trillions, is it fair that a small business operating without these funds should be penalized in this way. Why is our cost of doing business so high when we’ve operated without the influence of corruption?

Matthew E. Prude
iMarinePower LLC
[email protected]

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